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218-TNG Radio – Leslie Appleton-Young 3-25-11

Friday, March 25th, 2011

Leslie Appleton-Young

Vice President of C.A.R.

(Full Bio)


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This week Bruce is joined again by Leslie Appleton-Young. She is the Vice President and Chief Economist for the California Association of Realtors; a statewide trade organization with over 165,000 members. Leslie directs the activities of the association’s member information groups, she oversees the analysis of housing markets and broker industry trends, member communications and member development activities.  She is well known as a speaker in the California real estate community.

UCLA’s business school has projected that California’s unemployment will remain in the double digits until 2013. This does not surprise Leslie. We are experiencing cyclical job losses, because there are few sectors that have not been impacted. To some extent, our problem is structural. Sending jobs over seas to lower wage countries has been occurring for a long time.

During the downturn of the 90s, there were job losses concentrated in California due to a loss of migration. Leslie does not believe this is our main problem though. Our biggest issues are coming from the restructuring of corporations and businesses. 70% of costs are directly tied to labor, so the easiest way to become more efficient is to use fewer workers.

Leslie is uncertain of the impact that gas prices will have on real estate. Gas affects real estate because it impacts the overall economy. High prices means there will be less discretionary income available for purchasing. The cost of gas also impacts the ability of people to move further out. The UCLA forecast assumed there would be no significant long term reductions in gas supply, and that we would be able to weather the increases, but we do not know that.

Affordability is close to an all time high. The gap between California’s affordability and the U.S.’s affordability is much closer now as well. The California median home price peaked at $594,000, and the U.S. peaked at $230,000, so we were still over twice as expensive. California’s current median is $300,000, and the U.S. median is $170,000, so there is still a big gap between the two.

Bruce believes this all time low for housing affordability is going to give us a boost in migration. The challenge will be to provide job opportunities for the migration.

In a county like Riverside, where it is common to develop 250 to 300 subdivisions every year, there is going to be a huge increase in demand. The inventory that has been bought from lower priced years will be able to increase in value. Bruce notes that Riverside has only developed 10 subdivisions this year.

There has been a significant increase in household size over the last couple years, because families have been moving in with each other to weather the bad economy. Many people who chose to move in with their family will be looking to move once the economy improves, and that will create demand.

In another five years, Leslie believes down payment requirements and interest rates will be significantly higher. Getting rid of Fannie Mae and Freddie Mac will affect us for many years. The private sector will be demanding higher risk premiums to originate.

A number of surveys from Fannie Mae and others show that many people still aspire to own a home. Leslie does not believe this will change. However, financing will become a bigger burden. Leslie does not believe 30 year mortgages will be very popular in the future. Bruce believes that we must be heading towards a lower percentage of home ownership.

In business, when you have an advertising campaign that you know will work, that is called a control piece. The only way you change that control piece is by changing one thing at a time to see if something emerges as better or worse. We had a control piece called a zero down VA loan. This program produced less than 1% foreclosures, and FHA did the same thing for a long time. Unfortunately, we changed everything about how we performed loans within 5 years, and we got a bad result. Bruce does not understand why we won’t go back to the way things were before.

In 2005, the GSE delinquency rate was 7.8%, and the private label delinquency rate was 28.6%. In 2006, GSEs had a delinquency rate of 23.3%, and the private label delinquency rate was 45.1%. For loans originated in 2007, the GSE rate was 14.9%, and the private label rate was 42%. This information must have been overlooked by the people discussing what to do with our financial system in the future. Fannie and Freddie worked until 2005 and 2006 when then decided to get into the subprime and Alt-A market. Bruce is not sure if our sufferings would have been eased much had Fannie and Freddie not gotten involved in subprime lending. If they had not touched subprime, there still would have been a large amount of inventory being overpriced because of the easy financing available at that time. What we did wrong was pretend that it was okay to loan people money based on a stated income and without a down payment.

39% of defaults between 2006 and 2008 were due to home equity borrowing. Leslie does not believe it is healthy for people, as well as the real estate market, to borrow in such a way that they owe more on their home after a year of ownership. Bruce does not totally agree with that, because in the past that behavior was not as simple. Leslie believes it is bad for people to leave themselves no cushion. Bruce agrees with this statement.

In 1934, FHA did 80% LTV loans with 20 year terms. Gradually we went to 30 year terms, and the down payment requirements went to 10, to 5, to even 3%.

Bruce is concerned that if we lower loan limits, it will cause a significant price drop, and then you will have a continuous negative equity position. Bruce and Leslie hopes the government does not restrict the market too much in this manner. Leslie has noticed that the government’s decisions tend to be imbalanced.

When Bruce bought his first home and mowed the grass for the first time, it made him feel like a man. Being an owner changed the way he felt about himself. It is a big deal, and it is one of the big reasons for why people come to California.

Bruce was very frustrated when the president of MERS was questioned in front of the senate, because not one of the senators read his deposition. If you are going to make a huge decision against a very influential company like MERS, why not take an hour to try and understand the problem?

CAR’s website is www.car.org

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

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216-TNG Radio – Sean O’Toole 3-12-11

Friday, March 11th, 2011

Sean O’Toole

President of ForeclosureRadar

(Full Bio)


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This week Bruce is joined by Sean O’Toole. Sean is president and founder of ForeclosureRadar. He has successfully purchased and flipped over 150 commercial and residential properties in foreclosure. He has leveraged the software industry for 15 years to make a successful trustee sale business.

Sean does not believe we will see a growth in REOs in 2011. He believes we should see a growth in REOS, but we won’t. Since September 2008, when the financial world drastically changed, foreclosures have just been trickling out. He thinks this fact is due to bank and financial institution solvency.

Sean tracks the amount of time a property remains in the foreclosure process. In California, that time period is now up to 285 days, but it should only take 120 days. The average delinquency period for homes before reaching the foreclosure process is 334 days. If you add 334 days on top of the 285 days for the foreclosure process, it is a long period of time.

Some bills are being suggested right now to end the HAMP program and the Neighborhood Stabilization program. Sean believes those programs have been largely irrelevant from the beginning. In California, the total amount of money given to neighborhood stabilization was equivalent to one week of foreclosures. The billions of dollars spent on these programs seems like a lot of money, but when you look at the big picture, it really is not.

Sean’s company created a short sale tool because he wanted to give realtors and homeowners a way to see if certain lenders are approving short sales or not. Sean believes this is a very important resource, and he will be promoting it a lot this year. Wachovia was very good at approving short sales last year, and realtors that focused on Wachovia deals were able to perform more deals than other realtors.

ForeclosureRadar has also added multiple title related services. These services are primarily for auction investors who are interested in the state of a property. ForeclosureRadar offers links to county indexes, and webinars to train investors on how to look up title issues and figure out whether or not you are buying a first or second. Knowing the position of your loan is critical, because if you buy a second then you still have to pay for the first.

The average opening bid at the end of January 2011 was $254,000, and at the beginning it was $261,000. At the end of January average, about 80% go back to the bank, so that price range is still too high for most buyers. The average debt of a foreclosure by the end of January 2011 was $397,000, and at the beginning of the year it was $385,000. We have not seen a big change in the kind of inventory being foreclosed on.

The average opening bid for a foreclosure property is 15% above market value. Properties purchased by third parties are typically 25% below market value. If a lender successfully sells at a trustee sale, they typically take a 43% hit. Sean still sees properties going for sale at 50% of what they are worth. This is why programs like HAMP have been so ineffective in high equity states like California and Florida, because the problem is not payment affordability, the problem is the fact that they are 50% under water. When their payment adjusts back to a full rate, they will still not have the income level necessary to pay off their house. Also, unemployment and job transfers can occur which severely dampens a family’s ability to pay.

Lenders have not discovered whether or not drop bids, short sales, or REO sales make the maximum profit, and Sean does not think they are too concerned about that. Many things are controlled by servicers who do not suffer a loss from the losses they help cause.

FHA is developing a program for short refis. Obama is supportive of these programs to keep people in their homes, but on the other hand, Fannie Mae and Freddie Mac are concerned with maintaining equity.

A 30 page document just came out which discussed the future of financing. The goal of the document was to tell people that Fannie Mae and Freddie Mac will not exist. Sean believes this would be a good thing. He does not like our current 0% interest rate policy. We have baby boomers close to retirement, and they cannot make a decent living on fixed income in a zero interest rate environment. You could have saved a million dollars, but if you put it into something with nearly zero risk, such as a T Bill, you would be living off of $30,000 per year.

The U.S. has $14 trillion in debt right now. We have 115 million households, but only half of those households pay taxes. Of those tax payers, the top 20% pay about 80% of all taxes.

Currently, banks are being incentivized to push commercial foreclosures into the future, rather than deal with them now. The FDIC would be insolvent if they had to get rid of foreclosures in a timely matter. We have changed the accounting rules from mark-to-market to mark-to-model. The mark-to-model philosophy is driven by the idea that certain assets will increase in the future, which encourages businesses to set aside less for loan loss reserves.

As a nation, we went from a 45% debt to equity ratio, so we had 4.5 trillion dollars worth of residential mortgage debt on 10 trillion dollars of real estate. At the peak, we went to 10.5 trillion dollars worth of mortgage debt on a false market value of 20 trillion dollars. That market value was fictitious, and our market value is down to 13$ trillion, but we still have about $10 trillion in debt. We created about $4 trillion in excess debt, which we fundamentally do not have the proper level of household income to afford. In California, we have 2.8 million homeowners who either have negative equity or don’t have enough equity to sell their house and pay commissions. In Nevada, the loan to value ratio is 123%. They owe 23% more in their mortgages than what their real estate is worth.

The next big pile of REOs will probably come from HUD. FHA has a program to perform short sale refis. It required the lender to take at least a 10% hit, and a loan to value rate of at least 115%. FHA would provide government insurance on a loan up to 115% of the house’s value for the purpose of refinancing, so long as the lender would take a 10% principal loss. They have had difficulty getting this program off the ground, and now they are talking about ending the program.

Sean believes real estate prices will decline this year. However, Sean is a believer in holding real estate. He also believes the only way out of our debt problem is inflation, and real estate is a good investment during inflationary times.

Sean’s website is www.ForeclosureRadar.com

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

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The Norris Group Real Estate News Roundup 3/9/11

Wednesday, March 9th, 2011

Today’s News Synopsis:

Mortgage applications increased 15.5% last week, according to the MBA. UCLA economists predict California’s unemployment rate will remain above 10% until 2013. Freddie Mac’s level of REO properties has grown 145.7% over the past two years. Obama threatened to veto bills terminating the Federal Housing Administration’s Short Refi and the Department of Housing and Urban Development’s Emergency Homeowner Loan Program.

In The News:

Mortgage Bankers Association – “Mortgage Applications Increase in Latest MBA Weekly Survey” (3-9-11)

“Mortgage applications increased 15.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending March 4, 2011.”

Los Angeles Times – “California labor market recovery to go more slowly than predicted, report says” (3-9-11)

“The state’s unemployment rate will remain in double digits until early 2013, according to a report slated for release Wednesday by UCLA’s Anderson School of Management . That’s three months later than the university’s economists forecast in December, as California’s weak housing market continues to weigh on the region’s recovery.”

Housing Wire – “AARP sues HUD over reverse mortgage foreclosures” (3-9-11)

“A reverse or Home Equity Conversion Mortgage allows the borrower, who must be at least 62 years old, to convert a portion of the equity in the home for cash. No repayment is required until the borrower no longer uses the home as a principal residence or does not meet the obligations of the loan, often in the event of death.”

Housing Wire – “Cleveland Fed economist calls for toxic asset bad bank” (3-9-11)

“James Thomson, vice president and financial economist for the Federal Reserve Bank of Cleveland, believes regulators can ease the pain of future financial meltdowns by creating a bad bank to acquire all toxic assets, including underperforming mortgages.”

Housing Wire – “Freddie Mac implores mortgage servicers to reach borrowers early” (3-9-11)

“Freddie announced it will use a new scorecard to measure how its mortgage servicers perform beginning in the third quarter. The change is part of a wider revamp of how Freddie will manage its 1,400 servicing companies and monitor how they put troubled mortgages through the loss mitigation process.”

Housing Wire – “Freddie Mac hires two REO servicers to help handle rising inventory” (3-9-11)

“The partnership is designed to manage expected increases in REO inventory, Freddie Mac said. At the end of February, the GSE said,the level of its REO properties grew 145.7% in just two years. In 2008, REO inventory was 29,346 compared to 72,093 homes in 2010.”

Housing Wire – “Obama threatens to veto bills killing foreclosure programs” (3-9-11)

“The House Financial Services Committee voted last week approving two bills that would terminate the Federal Housing Administration’s Short Refi and the Department of Housing and Urban Development’s Emergency Homeowner Loan Program.”

Bloomberg - “Hotel Purchases Will Soar on Rising Room Rates, Jones Lang LaSalle Says” (3-9-11)

“Hotel rates will gain this year as a recovery in business travel fills more rooms, lodging companies including Marriott International Inc., the biggest hotelier in the U.S., said yesterday in Berlin. Leisure travel is also rebounding after consumers trimmed spending during the recession. Revenue per room in the hotel industry rose worldwide in 2010, according to researcher STR Global.”

Looking Back:

Capital Economics claims that U.S. home values are 20 percent undervalued. Yields on Fannie Mae and Freddie Mac mortgage securities fell to record lows. Trulia reports that 19 percent of homes had a price reduction last month. Real estate appraisers claim that Obama’s new foreclosure program encourages fraud.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

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The Norris Group Real Estate News Roundup 3/4/11

Friday, March 4th, 2011

 

Home Sales Set to Drop 2.3 percent this year: Reuters poll

Mortgage Applications Decrease in Latest MBA Weekly Survey

California Housing Production Dips in January, CBIA Announces

Pending Sales of U.S. Existing Homes Decline by 2.8%, More than Forecast 

Obama plan would accelerate sale of unneeded federal real estate

HSBC Suspends All U.S. Foreclosures

Short sales still take too long on average, report says

House committee votes to end FHA Short Refi program

California lawmakers revive bill that would kill dual-track foreclosures

Today’s News Synopsis:

Capital One Home Loans has chosen not to foreclose on any California mortgages. The government applauded TALF for netting $600 million in income. According to S&P, lenders need 13 months on average to foreclose in a judicial state. Altos Research claims home prices decreased 2% in February.

In The News:

Washington Post - “Obama officials, attorneys general closer to possible deal with banks in foreclosure mess” (3-4-11)

“Senior Obama administration officials, newly joined by state attorneys general, were on the brink Thursday of finalizing major elements of a possible settlement with large U.S. banks accused of flawed and fraudulent foreclosure practices, sources familiar with the discussions said.”

Housing Wire – “Capital One slows foreclosures to a trickle in California” (3-4-11)

“Capital One Home Loans is determined to not foreclose on any of the mortgages it services in California, according to sources inside the company.”

Housing Wire - “Pending home sales down everywhere, except the South: S&P” (3-4-11)

“Pending home sales nationwide are down for the second consecutive month, except for in the South where sales rose 1.4% between the months of December and January, according to a new report from Standard & Poor’s.”

Housing Wire – “Fed touts TALF for generating $600 million in income” (3-4-11)

“Government officials testifying before Congress Friday applauded the Term Asset-Backed Securities Loan Facility program, known as TALF, for netting $600 million in income.”

Housing Wire - “S&P: Foreclosures take twice as long in judicial states” (3-4-11)

“Lenders need 13 months on average to foreclose in a judicial state, more than twice the six months it takes in a nonjudicial state, according to research from Standard & Poor’s.”

Housing Wire – “Altos Research shows February home prices down 2%” (3-4-11)

“Home prices fell another 2% in February with declines in all 27 markets tracked by Altos Research. The company said prices are slowly improving and housing inventory is up 3.75% nationwide as the market moves into a much-anticipated spring selling season.”

Econoday - “Employment Situation” (3-4-11)

“Overall payroll employment in February grew by 192,000, following a revised 63,000 rise in January and a 152,000 gain in December. The February advance came in marginally lower than the updated consensus forecast for a 200,000 gain”

Looking Back:

One year ago, Bruce Norris claimed the government’s aid would not be enough to prevent the U.S. economy from sliding back into recession. The NAR reported that national pending home sales decreased by 7.6 percent in January. Commercial real estate delinquencies decreased in February. The delinquency rate for Fannie Mae loans increased to 5.38% in February.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

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The Norris Group Real Estate News Roundup 2/9/11

Wednesday, February 9th, 2011

Today’s News Synopsis:

The MBA reports mortgage applications decreased 5.5% last week. Zillow claims national home prices dropped 2.6% during the 4th quarter of 2010. Bernanke and Geithner said the economy is still having trouble, but have strong hope for stable growth.

In The News:

Market Watch – “10 reasons to be bullish on housing” (2-9-11)

“housing follows jobs. Consumer confidence is close to reaching last spring’s high point, the most optimistic the U.S. has felt since 2008. And while hiring hasn’t restarted in earnest, firing has slowed to a drip.”

Mortgage Bankers Association – “Mortgage Applications Decrease as Rates Jump in Latest MBA Weekly Survey” (2-9-11)

“The Market Composite Index, a measure of mortgage loan application volume, decreased 5.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3.9 percent compared with the previous week.”

NAR - “GSE Structures Must Protect Taxpayers and Ensure Mortgage Availability, Says NAR” (2-9-11)

“The House Financial Services Subcommittee will convene today for the first hearing in a series to debate the future of the government-sponsored enterprises, Fannie Mae and Freddie Mac. NAR’s recommended plan is to restructure the entities as government-chartered, non-shareholder owned authorities that protect taxpayers and ensure continued access to affordable mortgages for consumers who are willing and able to assume the responsibilities of the American Dream of home ownership.”

CNN - “30% of mortgages are underwater” (2-9-11)

“Home prices dropped 2.6% nationwide during the last three months of 2010, pushing more borrowers underwater, according to a quarterly real estate market survey from Zillow.com.”

Housing Wire – “Bernanke: Lagging real estate drags down investments” (2-9-11)

“During his testimony, the Chairman said while unemployment remains high, evidence of a ‘self-sustaining recovery’ driven by consumer and business spending has surfaced in economic data. He added that real consumer spending grew at an annual rate of 4% in the fourth quarter.”

Housing Wire – “Academics challenge Fed to create real jobs this time around” (2-9-11)

“According to the Labor Department’s Bureau of Labor Statistics, unemployment fell to 9% in January, though many critics point out that number does not include the amount of workers who have had pay scaled back or even those who have given up looking.”

Housing Wire – “Geithner: Weak housing, unemployment stifle economic recovery” (2-9-11)

“U.S. Treasury Secretary Timothy Geithner says the nation’s economic recovery is still plagued by high unemployment and a weak housing market, but he’s confident policy makers will address the nation’s current needs by raising the debt ceiling.”

Looking Back:

One year ago, Altera Real Estate foresaw significant improvement in the Orange County real estate market. National home prices returned to 2004 levels. Forecasters from iEmergent expected approximately $580 billion in mortgage refinancing during 2010.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

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The Norris Group Real Estate News Roundup 2/8/11

Tuesday, February 8th, 2011

Today’s News Synopsis:

Fannie Mae and the MBA predict the housing market will begin a rebound that will last for the next two years, and Zandi predicts 4% gdp growth through 2012. IAS claims national home prices fell 0.8% during the 4th quarter of 2010.

In The News:

Bloomberg - “New-Home Recovery Seen in U.S. as Post-Super Bowl Selling Season Kicks Off” (2-8-11)

“The chief executive officers of six of the 10 largest U.S. homebuilders cited the potential of a sales comeback in the spring, traditionally their strongest season, during conference calls in the last four weeks. Housing forecasts from Fannie Mae and the Mortgage Bankers Association show the new-home market will begin a rebound that will last through at least 2012.”

Housing Wire – “Millions of homeowners still at risk as economy heats up: ASF panel” (2-8-11)

“Zandi expects GDP growth of close to 4% this year and in 2012. He also projects jobs growth in 2011 to more than double last year’s roughly 1.25 million new private sector jobs, climbing to about 2.5 million to 3 million. The unemployment rate should end 2011 south of 9%, dropping to lower than 8% by the end of 2012.”

Housing Wire – “Fed opens comment on Dodd-Frank regulation of nonbank firms” (2-8-11)

“The Federal Reserve Board has opened the public comment period on a proposed rule that, if implemented, would allow regulators to pull certain nonbank firms under the Fed’s regulatory scope by declaring them systemically important to the financial system.”

Housing Wire – “IAS: House price index drops in 4Q, despite gains in South” (2-8-11)

“Integrated Asset Services’ home price index fell 0.8% during the fourth quarter of 2010, compared to 3Q but gained 0.9% when compared to the year-ago quarter — a slight gain attributed mostly to the government’s homebuyer tax credit boost.”

Housing Wire – “Investors seen as key to stablizing housing market” (2-8-11)

“A panel at the American Securitization Forum in Orlando, Fla., said that the best buyers for distressed sales are housing investors, not owner-occupants. Further, the role of the former is seen as key to keeping the economy on track, they say.”

Housing Wire – “Dallas Fed CEO says he’ll dissent if quantitative easing returns” (2-8-11)

“Richard Fisher, CEO of the Federal Reserve Bank of Dallas, said he’s hard-pressed to imagine any type of scenario where he would vote for more quantitative easing by the Federal Open Market Committee.”

Housing Wire – “KBW finds meaningful decline in January mortgage prepayments” (2-8-11)

“Total prepayments for Fannie mortgage-backed securities dropped to a constant prepayment rate of 19.3% from more than 25% in December and 26% in November. The CPR is the ratio of mortgages prepaid in a certain time period. CPR for Freddie fell to 21.5% from 28.5% in December and 30.6% in November.”

Orange County Register – “Why lenders are wary of trusts” (2-8-11)

“many lenders will not fund into a trust. Typically if a lender will or will not do something it has something to do with either their ability to foreclose at a later date if need be, or cost. In the case of the living trust it is a case of both.”

Looking Back:

One year ago, the U.S. Treasury Department reported 66,465 permanent loan modifications over 8 months. Delinquencies on prime jumbo loans increased to 10 percent in one month. Distressed property sales increased in Dana Point and Laguna Beach. Unemployment in the U.S. construction industry increased to 24.7 percent in January.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

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The Norris Group Real Estate News Roundup 12/07/10

Tuesday, December 7th, 2010

Today’s News Synopsis:

UCLA economists expect unemployment to remain above 10% until the end of 2012. TransUnion predicts the national mortgage delinquency rate could fall below 5% in 2011. A survey from RealtyTrac shows 60% of Americans believe housing will not recover for another 2 years. According to HOPE NOW, 1.54 million permanent mortgage modifications were completed in the first 3 quarters of this year.

In The News:

The Press Enterprise – “Economic recovery to stay muted” (12-7-10)

“Unemployment in California should start to decline next year but is likely to remain above 10 percent until the end of 2012, an economic forecast released today found. The quarterly forecast from UCLA’s Anderson School of Management suggests that the state will see something in 2011 that has been lacking for more than two years: job growth.”

Wall Street Journal – “U.S. Mortgage Delinquency Rate Could Fall to 5% in ’11″ (12-7-10)

“The percentage of U.S. consumers who are delinquent on their mortgages could fall to about 5% by the end of 2011, from an expected 6.2% at the end of this year, according to a leading credit bureau. Even so, the proportion of consumers who are 60 or more days overdue on their mortgages would still be sharply higher than the historical range of 1.5% to 2%, according to TransUnion LLC, which analyzed about 27 million randomly selected consumer records from its database.”

Housing Wire – “JPMorgan sees GSE prepayment rates slowing in January” (12-7-10)

“The prepayment speeds on Fannie 15-year mortgages increased 5% last month from October, while Freddie prepayments climbed 8%, according to JPMorgan.”

Housing Wire – “Private mortgage modifications reach 1.5 million to date, 125,000 in October” (12-7-10)

“Hope Now, a private sector mortgage alliance, said the mortgage industry has completed more than 1.54 million permanent loan modifications for homeowners from January through October, as foreclosure suspensions affected foreclosure sales and starts.”

Housing Wire – “American homebuyers suffer from a crisis of faith: survey” (12-7-10)

“A housing conference call organized by real estate listing websites, Trulia and RealtyTrac, revealed 48% of potential homebuyers in America have lost faith in the ability of the mortgage industry and 24% percent lost faith in the ability of the government to manage said market.”

Bloomberg – “Half of Americans Say Home Recovery at Least Two Years Away” (12-7-10)

“Almost six in 10 U.S. adults say a housing recovery is at least two years away, and more than a third say flawed lender practices are partially to blame, according to a survey by Trulia Inc. and RealtyTrac Inc.”

Orange County Register – “Chapman says prospects dim for housing” (12-7-10)

“Although Chapman University foresees modest price gains and increased homebuilding in Orange County next year, lingering problems from the housing bust will continue to dog the market. The number of homes for sale will be large, defaults and foreclosures will grow and consumer anxiety will be high, according to Chapman University’s 2011 economic forecast.”

Looking Back:

One year ago, the MBA reported that delinquency rates increased during the third quarter for most mortgage investor groups. Bernanke claimed the recovery would continue for at least a year, but that the U.S. still had  some trouble to overcome. Six banks were shut down Friday, which would cost the FDIC a total of $2.384billion.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor event calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 200 podcasts in our free investor radio archive.

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The Norris Group Real Estate News Roundup 12/06/10

Monday, December 6th, 2010

Today’s News Synopsis:

The Federal Reserve expects housing starts to reach 600,000 by the end of the year. Fannie Mae is suspending foreclosure evictions from Dec. 20 through Jan. 3, 2011. HUD representative Shaun Donovan claims the Homeless Prevention and Rapid Re-housing Program prevented or ended homelessness for 750,000 Americans.

In The News:

Army Times – “Consumer Watch: Walking away from your mortgage” (12-6-10)

“Nationwide, about 2.5 million homeowners have lost their homes in the last four years, according to the Center for Responsible Lending. Even some homeowners who could afford to make their payments have walked away because their homes have lost so much in value. Meredith says he won’t go that route. ‘I could not in good conscience walk away and dump the burden on the bank, who would then ask the taxpayers for another handout,’ he said.”

Orange County Register – “Calif. housing recovering, coast first” (12-4-10)

“The housing market has begun to stabilize in some of the coastal regions in the state. While credit unions have been willing and able to lend, demand for mortgages has been lean, despite the historically low interest rates. Members are either over leveraged, or concerned about future employment to make such a large purchase. Once individuals feel more secure about their income, they will be much more likely to make long-term purchases.”

Wall Street Journal – “US Housing Market To Rebound In 2011 -Freddie Mac Economist” (12-6-10)

“Macroeconomic factors suggest the U.S. housing market will improve in 2011, Freddie Mac’s chief economist said in a note Monday.”

USA Today - “Bernanke: Economy is fragile ‘very close to the border’” (12-6-10)

“Federal Reserve Chairman Ben Bernanke is stepping up his defense of the Fed’s $600 billion Treasury bond-purchase plan, saying the economy is still struggling to become ‘self-sustaining’ without government help.”

Housing Wire – “Chicago Fed sees housing sector improvement in 2011″ (12-6-10)

“The Fed forecasts that housing starts will reach 600,000 by the end of the fourth quarter of 2010 and increase to a total of 690,000 starts in 2011. The total number of housing starts in 2009 was 550,000.”

Housing Wire – “Fannie Mae to suspend foreclosure evictions for the holidays” (12-6-10)

“Fannie Mae will suspend foreclosure evictions from Dec. 20 through Jan. 3, 2011. The government-sponsored enterprise routinely halts the foreclosure process during the holiday season. Fannie currently holds a 4.56% serious delinquency rate on its mortgage portfolio, totaling more than $798 billion worth of loans as of October.”

Housing Wire - “HUD program keeps 750,000 Americans from homelessness” (12-6-10)

“The U.S. Department of Housing and Urban Development prevented or ended homelessness for 750,000 Americans through its Homelessness Prevention and Rapid Re-housing Program, the department’s secretary Shaun Donovan said Thursday.”

Housing Wire – “MBA says FHA indemnification proposal penalizes responsible mortgage lenders” (12-6-10)

“In October, the FHA proposed a new regulation forcing lenders to reimburse the government for insurance claims on defaulted mortgages that did not meet its guidelines within five years of the endorsement. It would require all new and existing lenders with the ability to insure loans on behalf of the Department of Housing and Urban Development to meet stricter performance standards.”

Bloomberg - “Your Underwater Mortgage Needs a Blow-Up Raft: Caroline Baum” (12-6-10)

“How can such a small sector of the $13.3 trillion economy exert such a strong downward pull on the whole thing? Real residential investment, as it’s formally known in the gross domestic product report, accounted for 2.4 percent of GDP in the third quarter. At its frothiest, in 2005, that share stood at 6.2 percent, a three-decade high.”

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor event calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 200 podcasts in our free investor radio archive.

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The Norris Group Real Estate News Roundup 12/03/10

Friday, December 3rd, 2010

Resources:
Foreclosure Freeze Chills Home Buying
Jobless claims continue bouncing around with 6.3% rise last week
Consumer confidence in Nov. hits 5-month high
Freddie Mac to suspend foreclosure evictions this holiday season
Fed made $9 trillion in emergency overnight loans
Fed data reveal wide scope of loan action during financial crisis
Fannie, Freddie Defend Foreclosures Amid Criticism

Today’s News Synopsis:

New Federal regulations on real estate appraisals have been released. FHA has chosen to leave the loan limit at $729,750 for 2011. Some builders are experiencing a 15 to 25 percent decrease in construction costs. The Bureau of Labor Statistics reports the unemployment rate increased to 9.8%.

In The News:

Wall Street Journal – “Deficit Plan Fails to Win Panel Support” (12-3-10)

“The president’s U.S. deficit commission received the backing of a majority of its 18-strong panel, but fell short of the 14 votes needed to possibly trigger congressional votes on its recommendations.”

Housing Wire – “Regulators set final guidance on appraisals” (12-3-10)

“Federal regulatory agencies released final guidance Thursday on how financial institutions will conduct real estate appraisals, the first nationwide update since 1994.”

Housing Wire – “Nonfarm payrolls add 39,000 jobs in November,unemployment rate up to 9.8%” (12-3-10)

“Nonfarm payroll employment rose slightly last month but considerably lower than most analysts were projecting adding just 39,000 jobs, and the unemployment level increased to 9.8%. The Labor Department’s Bureau of Labor Statistics said employment in most industries changed little during November although temporary workers and the health care sectors continue to see jobs gains while retailing shed another 28,0000 jobs during the month.”

Housing Wire – “FHA loan limit ceiling unchanged for 2011″ (12-3-10)

“The Federal Housing Administration released approved loan limits on mortgages it would insure in 2011, leaving the ceiling unchanged at $729,750. The Economic Stimulus Act of 2008 and the Housing and Economic Recovery Act of 2008 raised the FHA loan-limit ceiling to help stabilize a shaky housing market. The national floor remains unchanged as well at $271,050.”

Housing Wire – “Bair wants mortgages modified to mitigate losses before starting foreclosure” (12-3-10)

“Bair said servicing agreements need to give servicers the authority to attempt to mitigate losses in a timely manner and modify loans to address reasonably foreseeable defaults before putting the mortgage into the foreclosure process.”

Bloomberg - “Toll Brothers Deposits Rise 10% as Mortgage Rates Increase, Chairman Says” (12-3-10)

“Toll Brothers Inc., the largest U.S. luxury-home builder, saw deposits increase 10 percent compared with a year earlier in the past two weeks as mortgage rates began to rise, Chairman Robert Toll said.”

Orange County Register – “Builders benefit from cost savings” (12-3-10)

“Builders say construction costs are down 15 to 25 percent. That translates into an average cost of $100,000 to $140,000 for just the ‘sticks and bricks’ (without land) for a modest, 2,000-square-foot house.”

Realty Times – “Let it Shine, It’s Not Just Paint Color That Counts” (12-3-10)

“Many new tract homes are painted using a flat paint. While that may look nice at first, it can be very difficult to clean and instead of wiping off walls, you may find you have to touch them up with paint more frequently. Thankfully there are some other paint finishes that look great and are a bit more durable and easy to clean. The eggshell and low-sheen finishes put off a higher shine but they seem to last longer, stay cleaner, and are all around easier to maintain.”

Looking Back:

One year ago, Fannie Mae increased its minimum borrower credit score to 620. According to Lender Processing Services, loans were deteriorating 3 times faster than they are being approved. The average interest rate for 30-year, fixed rate mortgages declined to 4.7%

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor event calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 200 podcasts in our free investor radio archive.

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The Norris Group Real Estate News Roundup 12/01/10

Wednesday, December 1st, 2010

Today’s News Synopsis:

Freddie Mac announced it will suspend foreclosure evictions from Dec. 20 to Jan. 3, 2011. Automatic Data Processing reports the U.S. economy added 93,000 private-sector jobs during November. The Federal Reserve shared information about more than 21,000 individual transactions which provided $3 trillion in liquidity for market stabilization. According to the MBA, mortgage applications decreased 16.5% last week.

In The News:

NAR - “Realtors® Say Mortgage Interest Deduction Vital to Home Ownership, Economy” (12-1-10)

“The tax deductibility of interest paid on mortgages is a powerful incentive for home ownership and has been one of the simplest provisions in the federal tax code for more than 80 years. In a new survey commissioned by NAR and conducted online in October 2010 by Harris Interactive of nearly 3,000 homeowners and renters, nearly three-fourths of homeowners and two-thirds of renters said the mortgage interest deduction was extremely or very important to them.”

Wall Street Journal – “Deficit-Panel Chiefs Urge Tax, Spending Changes” (12-1-10)

“A 59-page proposal from the co-chairmen of the White House’s deficit-reduction commission, which they labeled ‘The Moment of Truth,’ calls for sweeping changes in how the country spends money and collects taxes, the starting point for a long debate about how to tackle the U.S. debt.”

Inman - “Move Inc. launches mortgage site” (12-1-10)

“Like other sites and services that enable consumers to shop for mortgages online, MortgageMatch.com employs an automated pricing engine that allows consumers to see the loan products and rates offered by multiple lenders.”

Mortgage Bankers Association – “Refinance Activity Continues to Decline as Rates Rise in Latest MBA Weekly Survey” (12-1-10)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending November 26, 2010. The Market Composite Index, a measure of mortgage loan application volume, decreased 16.5 percent on a seasonally adjusted basis from one week earlier. This week’s results include an adjustment to account for the Thanksgiving holiday. On an unadjusted basis, the Index decreased 34.2 percent compared with the previous week.”

Mortgage Bankers Association – “MBA: Commercial and Multifamily Mortgage Delinquency Rates Mixed in Third Quarter” (12-1-10)

“Delinquency rates for different commercial/multifamily mortgage investor groups were mixed in the third quarter, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report. The delinquency rate for loans held in CMBS is the highest since the series began in 1997. Delinquency rates for other groups remain below levels seen in the early 1990′s, some by large margins.”

Housing Wire – “Freddie Mac to suspend foreclosure evictions this holiday season” (12-1-10)

“Freddie Mac will suspend foreclosure evictions from Dec. 20 to Jan. 3, 2011, the company announced Wednesday. Freddie Mac’s mortgage portfolio stands at $39.6 billion as of October, according to its monthly summary report. Its serious delinquency rate stood at 3.82% in October as well.”

Housing Wire – “November employment increase largest in three years” (12-1-10)

“The U.S. economy added 93,000 private-sector jobs in November from the previous month, the largest gain in three years and a sign of a ‘brightening’ employment situation, according to the Automatic Data Processing report Wednesday. However, the improvement will not be enough to lower the unemployment rate, which according to ADP will likely remain above 9% for all of 2011.”

Housing Wire – “Bair says more regulation needed to restore integrity of mortgage servicing” (12-1-10)

“Bair said the robo-signing scandal spawned from misaligned incentives in the servicing industry, and called on the Financial Stability Oversight Council to fill in the regulatory gaps left by the Dodd-Frank Act. Regulation is needed to track the title of a loan and to properly document the foreclosure process, she said.”

Housing Wire – “Secret’s out: Federal Reserve reveals who got help in midst of financial crisis” (12-1-10)

“The Federal Reserve Board on Wednesday posted detailed information about more than 21,000 individual transactions that provided $3 trillion in liquidity to stabilize markets during the nation’s financial crisis.An analysis of the data by The Wall Street Journal showed Goldman Sachs used an emergency overnight loan program from the Fed 84 times for a total of nearly $600 billion. The Primary Dealer Credit Facility, announced in March 2008, was used 212 times by Morgan Stanley”

Bloomberg - “Fannie, Freddie Spar With Regulators on Foreclosures” (12-1-10)

“Acting Comptroller of the Currency John Walsh said in testimony prepared for a congressional hearing today that his agency is directing national bank servicers to suspend foreclosures for borrowers actively seeking to qualify for loan modifications.”

Looking Back:

One year ago, the NAR reported that pending home sales increased during October by 3.7 percent. The California Board of Equalization claimed that most homeowners would see a decline in property tax after a deflation of 0.237 percent.  According to Real Estate Econometrics LLC, the commercial mortgage default rate on loans held by U.S. banks increased to 3.4 percent in the third quarter of 09.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor event calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 200 podcasts in our free investor radio archive.

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